Random Clapper

Just a quick note to remind all of us that many of our Michigan Resident home Sellers would qualify for an exemption to the property transfer tax, even if they already paid it, you can request a refund.

Meeting Criteria

• 1. The property must have been occupied as a principle residence, classified as a homestead property.
• 2. The property's State Equalized Value for the calendar year in which the transfer is made must be less than or equal to the property's SEV for the calendar year in which the transferor acquired the property (bought it), and
• 3. The property cannot be sold for more than the true cash value (established by municipality) in the year it is sold

Example.  If the SEV of the principle residence when acquired in 2006 is $74,000 and the SEV when transferred in 2008 is $72,000. Then criteria one and two above are satisfied.  You can establish the true cash value by doubling the SEV at the time of transfer.  In this case the true cash value is $144,000.  If the sale price in 2008 is $140,000 then the sale does not exceed its true cash value.  All three criteria are satisfied and the exemption would apply.

 Your client can contact the Michigan Dept. of Treasury for up to 4 years after the closing to request a refund if TT was paid. 

Thank you to Brian Westrin J.D. from Michigan Association of Realtors for this explaination.